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Analytical research for Safaricom Limited company

A customer Satisfaction survey

Janet Maina

Degree Thesis

International Business

2010

DEGREE THESIS

Arcada

Degree Programme: International Business

Identification number:

Author: Janet Maina

Title:

Customer satisfaction survey for Safaricom limited compa-

ny.

Supervisor (Arcada): Sveinn Eldon

Commissioned by:

Abstract:

The objective of this research was to measure and assess the level of customer satisfac-

tion for Safaricom, to reveal problems that customers have come across and seek ways to

improve products and services for this telecommunications company. The theoretical

framework focuses on customer satisfaction, customer loyalty and the gap service quality

model by Zeithaml and the total perceived quality model by Grönroos. The survey was

conducted using questionnaires that were sent online and others given physically to par-

ticipants. The author was limited in data collection and hence resulted to online survey

that yielded more response than the physical data collection. Out of a possible 120 partic-

ipants the response rate was 70%. The questionnaire consisted of 12 questions 2 of which

were open-ended and required customer feedback. In the recent past, numerous surveys

for Safaricom were conducted but focused on different products of this company offers.

The author could therefore not compare these results to previous ones since this survey

focused on the general satisfaction level for all products and services.

The survey results indicated that the level of customer satisfaction for Safaricom‟s cus-

tomers was good but not excellent and revealed fairly inefficient customer service as the

most likely cause for dissatisfaction. Customers suggested that more action be taken to

improve customer service and others hoped to see price reduction for mobile broadband.

Keywords: Customer satisfaction, Service quality, customer loyalty,

customer service.

Number of pages: 45

Language: English

Date of acceptance:

Table of Contents

Customer satisfaction survey for Safaricom ............................................................. 5

1 INTRODUCTION .............................................................................................................. 5

1.1 Background and choice of study ...................................................................................... 6

1.2 Research problem ............................................................................................................ 6

1.3 Objectives of the study .................................................................................................... 7

1.4 Limitations of the research .............................................................................................. 7

2 General description of the research focus ............................................................ 8

2.1 Safaricom company presentation .................................................................................... 8

2.2 Objectives of the company .............................................................................................. 8

2.3 Financial aspects of Safaricom ......................................................................................... 8

2.4 Competitors...................................................................................................................... 9

2.5 Swot analysis for Safaricom ........................................................................................... 10

3 THEORETICAL BACKGROUND. ............................................................................... 12

3.1 Customer satisfaction .................................................................................................... 12

3.2 The gap model ................................................................................................................ 13

3.3 Grönroos Total Service quality model. ........................................................................... 16

3.3.1 What determines Customer satisfaction? ................................................................. 16

3.3.2 Outcomes of customer satisfaction ........................................................................... 17

3.3.3 Measuring customer satisfaction .............................................................................. 17

3.4 Customer loyalty ............................................................................................................ 19

3.5 Fundamentals of customer Complaints ......................................................................... 20

3.5.1 Managing customer complaints ................................................................................ 21

4 Service Quality ............................................................................................................. 22

4.1 Dimensions of service quality ........................................................................................ 23

4.2 Developing quality services. ........................................................................................... 24

4.3 The importance of customers in service delivery .......................................................... 25

4.4 Customer Roles in service delivery ................................................................................ 26

4.5 Customer Relationship Management ............................................................................ 27

5 METHODOLOGY ........................................................................................................... 28

5.1 Research Validity and reliability. .................................................................................... 29

5.2 Measuring Customer Satisfaction .................................................................................. 29

6 RESULTS OF THIS SURVEY ....................................................................................... 30

6.1 Open-ended comments. ................................................................................................ 39

6.1.1 Things they liked about Safaricom. ............................................................................ 39

6.1.2 Things they disliked most about Safaricom ............................................................... 40

6.1.3 Suggestions ................................................................................................................ 40

6.2 CONCLUSION .................................................................................................................. 40

References.............................................................................................................................. 43

Appendices ............................................................................................................................. 45

5

CUSTOMER SATISFACTION SURVEY FOR SAFARICOM

1 INTRODUCTION

Customer satisfaction can be gauged by the quality of products /services being rendered.

Chakrapani argues that quality decreases the cost of doing business by increasing effi-

ciency and by eliminating rework and waste that in the process, increases customer sa-

tisfaction. (Chakrapani 1998,3)

According to Chakrapani, customer satisfaction measurement is seemingly a subset of

service quality measurement. He notes, “A product or service that enhances customer

enjoyment is one that consistently meets customer needs and expectations.” This consti-

tutes customer satisfaction.

Theories used for this study are: The gap model of service quality and dimensions of

service quality by Zeithaml and the Total Perceived Quality theory by Grönroos.

In this research paper, the author will look into one Kenyan company that is in the tele-

communications sector as a case study to determine the level of customer satisfaction.

The name of this company is Safaricom Limited.

6

1.1 Background and choice of study

Safaricom is a service-providing company specializing in telecommunications. It is con-

sidered to be amongst the top performers in the industry in Kenya. With a highly com-

petitive thriving telecommunications market that Kenya has to offer; it is of utmost im-

portance for the telecommunications companies to take into consideration the level of

its customers‟ satisfaction. (http://www.theeastafrican.co.ke/news/-/2558/1003908/-

/item/2/-/11vgatq/-/index.html 06/09/2010)

Safaricom has already made a name for itself in the Kenyan market hence an interesting

choice for the author who is a subscriber and a shareholder of the firm. The research

studies done for this survey has been carried out for approximately six months.

Previously, there have been numerous surveys done with regards to independent Safari-

com‟s products and services but the author has not come across a comprehensive survey

on customer satisfaction for all of Safaricom‟s products and services. It is therefore not

possible for author to make comparisons between this survey and other previous incom-

prehensive surveys.

1.2 Research problem

In this research paper the author seeks to find out how satisfied Safaricom‟s customers

are with the firm‟s services as well as to determine what problems these customers have

come across. Objectively, this survey seeks to find ways in which Safaricom can im-

prove and develop their services. Findings from this research paper will be submitted to

Safaricom for implementation into its strategies to improve, expand or diversify its op-

erations.

In any given industry, the level of customer satisfaction is vital for the growth of firms

involved because of the competition amongst these firms. Higher levels of customer sa-

tisfaction lower the chances of customers changing their preferences in favor of the

competitors.

7

According to Michael Solomon Et al “ When a product succeeds in satisfying a con-

sumer‟s specific needs or desires, it may be rewarded by with many years of brand or

store loyalty, a bond between product or outlet and consumer that may be very difficult

for competitors to break.” (Michael Solomon et al 2006, 5)

1.3 Objectives of the study

This customer satisfaction survey is bound to reveal the expectations customers have for

Safaricom as well its evaluation on how it has performed in its yester years. This eval-

uation could be crucial for its growth when appropriately used to overcome its short-

comings in order to avoid the customers from shifting their preferences towards Safari-

com‟s rivals.

1.4 Limitations of the research

This research will involve a lot of online communication by the author to the respon-

dents of the survey since the author is not located in Kenya where Safaricom Limited is

located. Physical communication is a more effective way to carry out a survey because

the surveyor can get to meet the respondents and ask more questions or better yet make

conclusive observations on consumers- on whom the research is based.

The research is limited to Safaricom as a case study that is a limitation in itself. This

will mean that the material to be collected during the survey should be only from Safa-

ricom customers.

8

2 GENERAL DESCRIPTION OF THE RESEARCH FOCUS

2.1 Safaricom company presentation

Safaricom Limited Company started its global systems for mobile communications

(GSM) operations on 16th

May of 2002 when it actually became a public company with

limited liabilities and ceased being a private company under the companies Act. It had

been established in 3rd

of April 1997.

Safaricom is a leading provider of converged communication solutions that also oper-

ates on matters of voice, video and data requirements as pointed out on the company‟s

homepage. Safaricom provides broadband high-speed data to its clientele through its 3G

network.

Safaricom is also involved in community services such as health, education, sports, cul-

ture and environment –related projects as a way to give back to the community. Such

projects are shown on the company‟s homepage under “Safaricom centre”.

2.2 Objectives of the company

Offering unparallel quality service and increasing their coverage in the country is their

main focus. Safaricom has taken into account the customer segments in the telecommu-

nications market and have relied on their understanding to provide for the unique clien-

tele in order to succeed. Meeting the needs of its customers is also of utmost importance

to Safaricom, which is echoed in their assertion that states that their service focus is on

their customer. (http://www.safaricom.co.ke/index.php?id=839 06/09/2010)

2.3 Financial aspects of Safaricom

Safaricom is partly owned by the Government of Kenya 35%, Vodafone 40% and 25%

is owned by the shareholders. It is worth forty billion Kenyan shillings in shares. This is

approximately four hundred million Euros. Its market capitalization is worth two hun-

dred and twenty two billion Kenyan shillings as at 31st of March 2010.

9

Safaricom is listed in the Nairobi stock exchange market with a rather low but steady

share price ranging from 4-6 Kenyan shillings. This share price is interestingly low as it

has been trading in the stock exchange market for more than 2 years having started at 5

shillings during its Initial Public Offering (IPO) way back in 28th

March 2008. Some

reports indicate the Safaricom IPO was oversubscribed by 532%.

(http://news.xinhuanet.com/english/2008-05/31/content_8290022.htm 06/09/2010)

2.4 Competitors

Like any other company Safaricom is faced with the daunting task of having to face its

competitors and performing well enough to emerge as Kenya's largest mobile telecom-

munications network service provider. With over 10 million subscribers it has clearly

taken the lead in the market share at 78%. (http://www.cellular-

news.com/story/29920.php 06/09/2010)

Safaricom‟s competitors are: Zain Kenya that has 10.4% market share, Essar with 6.4%

and Telkom Kenya, which has, and 5.2% of the market share.

(http://www.businessdailyafrica.com/Company%20Industry/Safaricom%20gets%20repr

ieve%20in%20review%20of%20competition%20laws/-/539550/977120/-/1nub66/-

/index.html 06/09/2010)

With its dominant role in the market, Safaricom has had a fair share of benefits until

recently when its rival Zain Kenya introduced low-call rates as reported in the Business

Daily Africa webpage that leaves Zain as the cheapest network a move that is set to in-

crease its subscriber base. It could mean a shift from Safaricom for most of these sub-

scribers.

In response to this move, the CEO of Safaricom Michael Joseph insists that the compa-

ny is dedicated to delivering quality hence retaining a certain margin and indicated that

the rates might go down in future as well.

Telcom Kenya as well as Zain charges much lower rates for international calls than Sa-

faricom, which has seen an upward movement of subscribers to their networks.

(http://www.businessdailyafrica.com/Telcos%20price%20battle%20spreads%20across

%20borders/-/539552/1020018/-/item/1/-/12lfiwjz/-/index.html 29/09/2010)

10

According to Kotler (2000, 14) “competition includes all the actual and potential rival

offerings and substitutes that a buyer might consider”. In this case, Safaricom ought

take into consideration companies producing substitute products are competitors and

should also be aware of their position relative to competitors.

Learning about the competitors‟ strengths and weaknesses will assist in making strateg-

ic decisions and gaining competitive advantage. (Michael Porter 1998, 4) lists five

forces that influence a company‟s market and competition. These forces are: industry

competitors, potential new entrants, substitutes, buyers and suppliers.

2.5 Swot analysis for Safaricom

SWOT analysis are the strengths weaknesses opportunities and threats, Safaricom pos-

sesses. According to Southerland and Canwell (2004, 276) swot analysis is a very suita-

ble technique in understanding the overall future of an organization considering the

launch of new projects. Taking advantage of these strengths and opportunities will ena-

ble this company to manage its threats and weaknesses to ensure it maintains its high

market share and provide better services for its customers.

STRENGTHS

Leading market share

Innovative

Wide range of products to offer

Wide network coverage unlike

some competitors

Positive public image due to com-

munity work

WEAKNESSES

Jamming of network because of a

large subscription base

Higher mobile charges as com-

pared to its biggest competitor

ZAIN.

Relatively low levels of customer

satisfaction characterized by the

very long queues at the customer

service offices

11

OPPORTUNITIES

Operating M-pesa (mobile bank-

ing) has seen its subscription base

grow even more.

Its stability creates confidence in

its customers. Its biggest competi-

tor has seen change of ownership a

couple of times in the recent years.

THREATS

Price wars

Competitors

Network congestion

Replication of its innovative ideas

12

3 THEORETICAL BACKGROUND.

3.1 Customer satisfaction

(Chakrapani 1998,3). has defined this as the fulfillment a customer gets when a product

or service that enhances customer enjoyment consistently meets customer needs and

expectations “A customer is satisfied once his/her needs, real or perceived are met or

exceeded.” (Gerson 1993,13)

The degree of customer satisfaction depends on the correlation between the customer‟s

expectations and his/experience. Noriaki Kano developed a model to further explain

customer satisfaction as shown on fig 1 below.

Figure 1 The Kano model of customer satisfaction

13

Customer satisfaction is influenced by different factors such as; service quality and

product quality and price as well as personal factors that include customers‟ attitude and

their emotional state. (Zeithaml & Bitner, 1996,124)

According to Kano, the basics needs are expected to be met by the customer and most

likely the customer will not be satisfied if only the basic needs are fulfilled. The ex-

pected needs are depicted as the performance in the model illustrated in figure 1. These

expected needs are those that the customer is aware of and would prefer to be fulfilled

but not always a requirement.

Last but not least are the exciting experiences that even the customer cannot imagine

and are delightful surprises to them like for instance offering excellent customer servic-

es. (Bo Bergman & Bengt Klefsjö 1994 pages 282-283)

3.2 The gap model

The original gap model of Parasuraman et al. (1985) is yet another model used to de-

scribe customer satisfaction and quality service is the Gap Model that illustrates in

depth; the relationship between customers‟ expected and experienced service. It also

explains the causes of customer dissatisfaction. It consists of a total of five gaps as illu-

strated on figure 2.

Gap 1: This is the gap between customer expectations and management's percep-

tions of those expectations. This gap results from differences in a customer‟s

perceptions and the actual outcome of services rendered to them. This gap also

comes about as a result of inadequate marketing research and bureaucracy

brought about by many levels of management.

Relationship marketing is an ideal strategy to close this gap since it will enhance

strong bonds between the service provider and its customers. These relationships

create opportunities for firms to accurately learn about customers‟ expectations.

According to Zeithaml, firms that create strong relationships with their custom-

ers are less likely to have this kind of gaps occurring. (Zeithaml & Bitner

1996,40)

14

Gap 2; The gap between management's perception of what the customer wants

and specifications of service quality expected by customers which is brought

about by insufficient commitment to service quality, lack of goal setting, inade-

quate standardization and perception of impracticalities on the part of manage-

ment.

To close this gap, Zeithaml suggests that companies should incorporate impor-

tant customer satisfaction barometers into their measurement systems in order to

attain the perceived desired quality. “Companies need measurement systems that

incorporate and align measures of customer perceptions and satisfaction with

pivotal operational and performance indicators.” (Zeithaml & Bitner 1996,43)

Gap 3: This is the gap between service quality specifications and delivery of the

service. It results from mostly lack of team work and perceived control which in

turn bring about poor employee and technology job fit as well as conflict of roles

and role ambiguity amongst the management hence uncoordinated service deliv-

ery that is not in line with service quality specifications.

Putting in place the necessary resources needed to achieve service quality is cer-

tainly a good way to close this gap. For service companies, synchronization of

demand and capacity is important because such companies are faced with situa-

tions of over-demand and under-demand. With lack of adequate resources to

deal with over-demand of customer needs, companies face loses in sales and in

other cases in “slow periods” company‟s resources are underutilized. (Zeithaml

& Bitner 1996,45)

Gap 4; A gap between service delivery and what the company promises to the

customer through external communication. This gap arises as a result of inade-

quate communication amongst operations, advertising and sales people. A ten-

dency to overpromise in advertisements leads customers to perceive prod-

ucts/services as high quality hence the gap.

Providing accurate and appropriate communication and promoting clear under-

standing of service delivery to the employees helps to close this gap. Proper and

sufficient horizontal communication between the sales and operations and be-

tween advertising and operations departments would assist in closing this gap.

15

Zeithaml suggests creating systems that coordinates the service delivery depart-

ment together with the external marketing departments in order to reduce this

gap. (Zeithaml & Bitner 1996,47) The gaps appear as shown in the figure 2.

Figure 2 The Gap model of service quality

Gap 5: This is also known as the customer gap. It illustrates the disparity be-

tween customers' service expectations and their perceptions of service perform-

ance. “Judgement of high and low service quality depend on how consumers

perceive the actual service performance in the context of what they expected.”

(Bo Berg & Bengt Klefsjö 1994 274)

Closing this gap is achieved by first closing the other gaps. (Zeithaml & Bitner

1996,38)

16

3.3 Grönroos Total Service quality model.

Customer satisfaction is also influenced by Perception of total quality to customers con-

stitutes of the brand that emerges in their minds as a result of incorporating all service

dimension variables such as experiences, expectations, image and brand values. These

variables add new aspect to models of perceived quality.

Grönroos (1982, 1984, 1988) had proposed and defined the dimensions of service qual-

ity as comprising of technical and functional parts.

Technical quality is the quality of the service product commonly known as Technical

Customer Service Performance (TCSP).

Functional quality is defined as the manner in which the customer receives the service

product, which is commonly called „customer service‟. This aspect is called Functional

Customer Service Performance (FCSP).

3.3.1 What determines Customer satisfaction?

Customer satisfaction goes hand in hand with service quality. With better service

quality customers‟ expected needs are met and exceeded hence more satisfac-

tion.

Some customers‟ satisfaction would also be determined by price. If the price

were fair to them then it would constitute to some level of satisfaction.

Product service or features do determine customers‟ satisfaction. If the products

or service are designed well enough to meet and even exceed their needs then

they are likely to be satisfied with the services/products.

Perceptions of equity and fairness by companies would influence customer satis-

faction in the sense that customer service is expected to be good. It helps to cre-

ate a positive image about such companies in the mind of the customer.

Other consumers are a big influence of customer satisfaction because they would

share past experiences. Positive experiences by other consumers have a big im-

17

pact on customer satisfaction since new customers will be expecting positive ex-

periences as well and possibly even satisfaction.

3.3.2 Outcomes of customer satisfaction

Increased revenue. This will come about as a result of more sales. When cus-

tomers are satisfied they more likely to be back for more products/ services. Sa-

tisfied employees are likely to stay longer and in doing so keep valuable exper-

tise and customer relationships within the organization. Sales and marketing and

set-up costs are amortized over a longer customer lifetime. “On average, it can

cost 5 to 10 times as much to attract a new customer as it does to keep a current

customer satisfied.” (Kotler et al 2008, 392)

Customer retention is also expected since customers‟ needs are met in a manner

that satisfies them. Satisfied customers are likely to remain with their service

providers for as long as their service provides‟ competitors do not match the sa-

tisfaction they get from their service providers. Usually, repeat customers often

cost less to service.

Satisfied customers provide referrals. Positive word of mouth from satisfied cus-

tomers is also an expected outcome. The word of mouth communication is a

very effective tool of marketing for businesses. Consumers are more likely to

believe word of mouth than other modes of advertisements since a word of

mouth could mean “a past experience” which is more believable by most con-

sumers.

Satisfied customers may be prepared to pay a price premium moreover customer

expenditure increases over time.

3.3.3 Measuring customer satisfaction

According to (Hill & Alexander. 2007, 3-4) The main purpose of customer satisfaction

measurement is to provide information on how to improve in the future. A good cus-

tomer satisfaction survey is based on the most important requirements of customers

Measuring customer satisfaction provides managers with the correct information, which

18

enables them to make the right decisions to maximize customer satisfaction and as a re-

sult improve customer retention. However, monitoring customer satisfaction is of no use

if management is not committed to the process of acting on the results. (Cook 2008, 95;

Hill & Alexander 2006, 5, 9)

Whenever something is measured, it is performed, accomplished and generally im-

proved upon. Employees do, not take issues that are not measured, seriously because it

is impossible to base performance management and rewards on them. (Gerson, 1993, 6;

Hill &Alexander. 2006, 35) “Identifying the extent to which an organization is doing

best what matters most to customers” (Hill & Alexander. 2006, 7)

According to Gerson, there are seven basic reasons for measuring customer satisfaction

that are listed below.

a. Identification of customer perceptions. This is vital for companies to identify the

perceptions that their customers have in order to work on them to build better re-

lationships that in turn help to improve on their service quality.

b. Determine customer needs, wants, requirements and expectations. In order for

companies to satisfy their customers they need to know what is required and ex-

pected of them by their customers.

c. To close gaps. In a bid to carry out customer satisfaction survey, the existing

gaps between service providers and customers are identified and hence worked

upon. These gaps are illustrated on Figure 2.

d. To check up on the existing service quality models. Measuring the performance

of the service quality models in use is a good way to determine the need for im-

provement and modifications in order to increase the customer satisfaction le-

vels.

e. To improve performance and hence increase profits. Measuring customer satis-

faction will lead to improved service quality then increase customer satisfaction

will follow and eventually better profits since satisfied customers are likely to

return for more services.

19

f. Customer satisfaction survey reveals the company‟s position as well as sugges-

tions on which way forward in the customers‟ perspectives.

g. Application of continuous improvement process. In order to attain continuous

improved services, customer satisfaction survey ought to be carried out on a

continuous basis for the sake of creating long-term relationships with customers

as well as long-lasting solutions to improve services. (Gerson 1993,32-39)

3.4 Customer loyalty

Customers that are totally satisfied are more likely to be loyal customers. However the

relationship between customer satisfaction and loyalty varies greatly across industries

and competitive situations. (Kotler et al 2003,23)

With the ever-increasing competition the cost of attracting new customers is rising. It

might cost five times as much as attract new customers as to keep current customers

happy. Customer retention can be achieved by delivering high customer satisfaction and

value that result in strong customer loyalty and well-developed business relationships.

(Kotler et al 2003,23) The different levels of customer loyalty are as shown in the figure

3 sourced from www.emerald.com

Figure 3 The ladder of customer loyalty in relationship marketing

20

Customer loyalty has different levels and it is very important for firms to target the right

customer whose loyalty can be developed and not those whose loyalty is easily attracted

by cutting prices (Sarah Cook 2008: 11)

A prospect in this ladder refers to someone with the potential to become a customer.

Prospect customers usually show interest in promotions carried out by firms. A cus-

tomer on the other hand is a person who has already purchased goods or services at one

point in time.

As depicted in the ladder, more emphasis should be put towards these two components

of the in order to ensure that they become regular clients.

A client is one who goes back for products or services from the same dealer that they

had previously purchased from. A supporter in this context is a person who supports this

dealer passively whereas an advocate is a customer who promotes the dealers business

on his behalf. He is usually a satisfied customer and often recommends the dealers

products/ services to others. At the top is a partner who is enters into a partnering rela-

tionship with the firm in question.

(http://www.emeraldinsight.com/journals.htm?articleid=842399&show=html

13/09/2010)

3.5 Fundamentals of customer Complaints

The customer service complaint is somewhat inevitable since even the most well ma-

naged businesses will occasionally have failures; it is equally foreseeable that from

these failures will

emanate complaints. It is healthy to recognize complaints as basic and necessary parts

of the overall business environment.

These complaints should be looked upon both as opportunities to maintain past accounts

and to secure new ones, rather than as tribulations. “Customer complaints often provide

an opportunity for a company to learn about deficiencies in their product, process or

21

service delivery -- and to take steps towards improvement.”

(How to Handle Customer Complaints | eHow.com 13/09/2010)

3.5.1 Managing customer complaints

Below are some basic yet important steps to follow whenever approached by a customer

complaint.

a. Listen very carefully to the complaint and if necessary paraphrase it in

order to get the facts of the complaint with preciseness. This will ensure

that you as the service provider and the customer with the complaint are

actually on the same page.

b. Start by apologizing to the customer for the mishap and try to look at the

complaint from their perspective. Showing empathy for the customer

would be a positive move. Handle yourself with professionalism and

avoid showing signs of uncertainty and nervousness.

c. Ask for a recommendation from the customer complaining. The sugges-

tions recommended might be of great importance in rectifying the situa-

tion at hand.

d. Gather all the necessary facts involved in that situation before making a

final decision on the course of action. Be sure to take the customer‟s con-

tact details should the solution of the problem need to be solved at later

date.

e. Develop a plan for addressing the complaint.

f. Implement the plan and follow up.

(How to Handle Customer Complaints | eHow.com 13/09/2010)

22

4 SERVICE QUALITY

Zeithaml and Bitner describe Service quality as the delivery of excellent or superior

service relative to customer expectations. Consumer‟s judge service quality based on the

process of service delivery and their perceptions of the technical outcome of the service

rendered.

Process quality in this case would refer to things such as courtesy of Safaricom em-

ployees and employees‟ responsiveness in returning phone calls.

Technical outcome can be determined on services that have specific outcomes and in

this case a good example would be an instance in which a Safaricom subscriber has an

Internet connection problem and approaches the technical team at Safaricom to get

his/her connection in place. In such an instance the customer would be able to judge the

actual competence or effectiveness of the outcome. (Zeithaml & Bitner 1996,117)

Figure 4 is a diagram depicting customer perceptions of quality and customer satisfac-

tion dimensions.

Figure 4 Factors influencing customer satisfaction

perceived quality

Delivery

Quality

Price

Customer Expectations

Performance

Reliability

Function

Quality

Value

customer satisfaction

Customer Needs Fulfilled

Performance

Reliability

Function

Quality

Value

23

4.1 Dimensions of service quality

In the assessment of service quality, consumers take into consideration these five di-

mensions;

Reliability: Delivering on promises. Reliability is described as the ability to de-

liver on the company‟s promises dependently and accurately with matters per-

taining to service provision, problem solving strategies and pricing.

Firms that fail to deliver on their reliability promises do actually fail customers

in the most direct way and according to Zeithaml; customer expectations for ser-

vice are likely to go up when service delivery is underperformed. “When service

failures occur, customers‟ tolerance zones are likely to shrink and their adequate

and desired service levels are likely to rise.” (Zeithaml & Bitner 1996,121)

Responsiveness: Willingness to help. Responsiveness is the willingness to assist

and provide prompt customer service whenever required. The emphasis is main-

ly on the attentiveness and promptness of customer services rendered such as

questions, problems and complaints that customers would need to be dealt with.

Responsiveness is determined by the length of time that customers have to wait

for assistance and the flexibility of service providers to customize their service

in order to meet customers‟ needs. Responsiveness perceptions do shrink when

customers are made to wait too long to get assistance.

Assurance: Inspiring trust and confidence. Assurance is the knowledge and cour-

tesy of employees as well as the ability of a firm to inspire trust and confidence

in customers. This assurance is mostly required in services that involve risks

such as insurance, banking or brokerage services.

Trust and confidence is normally embodied in the person that connects a firm

with its customers for instance brokerage agents link their firm to customers. It

would be important for such agents to inspire trust and confidence in order to

build loyalty and assurance in their customers.

24

Visible evidence that would inspire trust and confidence in customers would be

that of educational qualifications such as degrees and awards. New customers

are likely to use such evidence to assess assurance.

Empathy: Treating customers as individuals. According to Zeithaml, empathy is

the caring and individualized attention given to customers. Normally empathy is

conveyed when customers get personalized or customized services and are made

to feel unique and special.

Knowing customers by name and building personal relationships with them

creates empathy in firm reflecting personal knowledge preferences of customers‟

wants. Customers like to feel understood and special.

With personal knowledge of customers‟ wants, firms are able to customize their

services to meet these needs.

Tangibles: Representing the service physically. Tangibles are the physical ap-

pearances of physical facilities, equipment, personnel and communication mate-

rials according to Zeithaml.

These tangibles represent images of the services that customers expect to get. In most

cases new customers use these tangibles to evaluate the service quality so it is of great

importance that firms enhance their image to reflect quality as well as provide continui-

ty in their “service quality image”. (Zeithaml & Bitner 1996,119-123)

4.2 Developing quality services.

The development of quality philosophy according to Edwards Deming is heavily influ-

enced by the role of top management. He believes that if top management is totally

committed to quality issues then there is a possibility of achieving continuous quality

improvement.(Bo Bergman 1994;56)

Deming‟s philosophy of quality 14-point management list is quoted below.

1) Create constancy of purpose for improvement of product and service.

25

2) Adopt the new philosophy.

3) Cease dependence on inspection to achieve quality.

4) End the practice of awarding business on the basis of price tag alone. Instead,

minimize total cost by working with a single supplier.

5) Improve constantly and forever every process for planning, production and ser-

vice.

6) Institute training on the job.

7) Adopt and institute leadership.

8) Drive out fear.

9) Break down barriers between staff areas.

10) Eliminate slogans, exhortations and targets for the work force.

11) Eliminate numerical quotas for the work force and numerical goals for the man-

agement.

12) Remove barriers that rob people of pride of workmanship. Eliminate the annual

rating or merit system.

13) Institute a vigorous program of education and self-improvement for everyone.

14) Put everybody in the company to work to accomplish the transformation.

4.3 The importance of customers in service delivery

“Customer participation is part and parcel of service delivery since services are actions

or performances typically produced and consumed simultaneously. Because of their par-

ticipation they are indispensable in the production process of service organizations and

they can actually control or contribute to their own satisfaction. ” (Zeithaml 1996,366)

The level of customer participation is considered low, moderate or high in varying ser-

vices. In the low level of participation, customer‟s physical appearance is all that is re-

26

quired in the production and delivery of services like for instance in the restaurant or

airline industry.

The moderate level of customer participation is characterized by customers‟ provision

of information about the service providers acting as a consultant, offering innovative

ideas and communicating positively or negatively with the existing and potential cus-

tomers. Good examples depicting this level of participation are; tax preparation and

haircut services.

The high level of customer participation involves partnership between the customer and

the service providers to help assess and customize service delivery. Such a customer

could be a partial employee who contributes effort to enhance service delivery.

(Zeithaml 1996, 367)

4.4 Customer Roles in service delivery

Customers as Productive Resources: This involves the customer who is highly

involved with the service provider in the production process. Such customers are also

referred to “partial employees” as mentioned earlier.

The quality of customer‟s input as well as the quality and quantity of the resulting out-

come generated affects a company‟s productivity especially for service production

firms. For instance in an accounting firm, the quality of tax preparation would be greatly

influenced by the quality of information the customer contributes.

Customers as contributors to Service Quality, Value and Satisfaction

In service delivery, customers can contribute to their own satisfaction. With effective

customer participation, customer‟s needs are likely to be met say for instance a case of a

customer who wants to lose weight. Contribution of such a customer will determine the

level of satisfaction they are likely to get and hence without effective participation of

the customer, the desired outcome is not achievable.

27

Customers also contribute to service quality by asking questions or even by complain-

ing whenever they get poor services. By voicing their concerns, they are able to inform

the service providers on what to work on to better their services in future.

(Zeithaml 1996, 371)

Customers as competitors; In cases where customers are partial employees or where

they are highly involved in the production process then at some point they would con-

sider satisfying themselves without the intervention of service providers.

A good example illustrating this role would be that of a customer who desires to lose

weight with the help of a trainer but then decides to lose weight by themselves without

the trainer‟s assistance and actually succeeds. (Zeithaml 1996, 372)

4.5 Customer Relationship Management

Customer relationship management (CRM) is a strategy for managing a company‟s inte-

ractions with clients and sales prospects. It involves use of technology to organize, au-

tomate, and synchronize business processes such as; marketing customer service and

technical support.

CRM aims at identifying profitable customers and find effective ways to develop rela-

tionships with them, and win new clients, nurture and retain those the company already

has, entice former clients back into the fold, and reduce the costs of marketing and

client service so as to nurture business on long-term basis with long-term success and

profit.

CRM allows a company to find and attract new profitable customers and by so doing

the company stays on top of their needs and hence increase their satisfaction. This also

helps to build customer relationships and brand loyalty. (Solomon et al, 2009, 230)

28

5 METHODOLOGY

Data collection for this research involved both primary and secondary sources. Primary

data was collected through qualitative and quantitative methods. Qualitative research is

an exploratory research methodology based on a rather small sample size intended to

provide insight and understanding a problem setting.

Qualitative research is focused on acquiring qualitative data /information and under-

standing of the underlying reasons attitudes, feelings and motivations of product users.

Proper examples for qualitative research are; in-depth interviews and focus groups.

(Kotler et al, 2008,335)

Quantitative research is numerically orientated and is aimed at qualifying the data in

statistical analysis. Data is normally illustrated with diagrams and graphs. It is focused

on a large number of representative cases and usually involves a large sample size

Quantitative methodology is set to answer research questions such as what, where, how

often or how much. It is carried out through questionnaires that in most cases have pre-

determined answers as well as through survey. (Malhotra, 2005, 43)

For this survey, the researcher opted to use a quantitative research methodology by giv-

ing out questionnaires to a random sample of Safaricom‟s customer base. A total of 120

persons were involved in this survey but unfortunately only 84 people responded to the

questionnaire.

The researcher who is based in Finland had to travel to her home country and collect

data because that is where Safaricom was based and most importantly it is where the

customers were.

Questionnaires were also sent online through facebook social network and to yahoo

email addresses that the author managed to get from marketing forwards. This turned

out to be very convenient since it did not involve a lot of movement. The online ques-

tionnaire was made up of 50 out of the 84 respondents. Online respondents were mainly

based in urban areas.

The author also used secondary data in this research in form of books and the Internet to

source out information necessary for this study.

29

5.1 Research Validity and reliability.

Crowther describes validity as the extent to which the data collection method measures

what it is supposed or expected to measure. Failure for ensuring valid research could

lead to collection of data that is meaningless or misleading for the research in question.

(Crowther & Lancaster 2005,80)

The survey was carried out to investigate the level of customer satisfaction amongst Sa-

faricom‟s customers and the fact that this data was collected from these customers

means that the information was a true reflection of what the customers felt hence its re-

liability.

The results are considered reliable also because the sample used for this survey was

considerably large enough and represented a wide spectrum of the different types of

customers that the researcher was looking for.

5.2 Measuring Customer Satisfaction

It is of utmost importance to come up with a customer satisfaction system that can be

put into action and which involves key measures of satisfaction in order to come up

with the necessary and required data. Figure 5 is a diagram showing a step-by-step

guide to measuring customer satisfaction (Chakrapani 1998, 213)

Figure 5 A step-by-step guide to measuring customer satisfaction

Conceive

•1 Gather background data

•2 Choose attributes to measure

•3 Choose the right audience

Develop

•4 Choose the basic CSM questions

•5 Choose the right metric

•6 Make anlaysis action-oriented

Interpret & Track

•7 Consider segmenting the marketing

•8 Interpret the measures correctly

•9 Use results cautiously

•10 Create a tracking system.

30

6 RESULTS OF THIS SURVEY

(Chart 1)

Table 1 Gender

For this research, the author was able to collect information from more males

than from females. As shown in the chart above, males had 53% representation

as compared to 47% representation by their female counterparts.

47

53

Gender

Female

Male

31

(Chart 2)

Table 2 Age Distribution

Chart 2 illustrates age distribution amongst respondents. The low percentage of

respondents below 19 years of age would best be explained by the fact that these

are age group belongs to high school students who did not participate much in

this research.

Respondents above 60 years of age are represented with a low percentage be-

cause they are not so much into telecommunications and modern technology.

They are mostly from the rural areas where people can live with minimal use of

mobile phones or other sorts of telecommunications. They are also in their re-

tirement stage.

Respondents between 20 - 45 years of age comprise of the youth and the work-

ing group hence the need of interaction using telecommunication every now and

then. This is reflected by a whooping 78% of the respondents.

Respondents between 45-60 years belong to a working group that is heading to-

wards retirement and are not actively involved in using telecommunication mod-

es as compared to their younger counterparts.

2 %

33 %

45 %

15 %5 %

Age groups

15-19 years

20-35 years

35-45 years

45-60 years

60+ years

32

(Chart 3)

Table 3 Area of residence

In order to get proper representation of customer views the researcher targeted

customers from both the rural and urban areas. However response from the rural

areas was underwhelming with only 26% to show for it. Most of the participants

were mainly from the urban areas comprising of 74%. As mentioned above 50

out of the 84 responses was through the Internet.

74 %

26 %

Area of residence

Urban

Rural

33

(chart 4)

Table 4 Profession

The unemployed participants made up 3% that could be simply explained by the

fact that one needs money for the continued use of telecommunications modes.

With a source of income it is possible to pay for Safaricom‟s products and ser-

vices hence 64% among the employed and 23% amongst students. Students are

very socially interactive and as this research revealed, they are fond of using Sa-

faricom‟s products and services.

23 %

64 %

3 %10 %

Profession

Students

Employed

Unemployed

Retired

34

(Chart 5)

Table 5 Various Safaricom's products

The research revealed that most of the subscribers commonly use Safaricom to

make calls and VAS purposes. VAS in this case involves messaging, music and

information e.g. getting 411 through a text message to Safaricom.

Internet browsing through the phone is very common amongst the youth, which

explains the figures illustrated in the chart.

M-pesa is mobile banking as well as money transfer services through Safaricom.

This service has seen an increase in subscription base for Safaricom since its in-

troduction hence the high values in the chart.

http://www.safaricom.co.ke/index.php?id=296

Voice

Internet

VAS

M-pesa

020

4060

80100

93

66

89

67

Safaricom products

Safaricom products

35

(Chart 6)

Table 6 Satisfaction levels

According to this research, 15% of the customers‟ satisfaction was met and pos-

sibly exceeded hence the excellent satisfaction level. 50% found Safaricom‟s

products and services to be good. 30% of the respondents found the products to

be fair which also meant that their perceived value was met but not exceeded. It

ought to be in the company‟s interest to exceed customer expectations in a bid to

improve customer satisfaction levels.

From this survey 5% of the respondents were dissatisfied with Safaricom‟s

products and services. The company ought to do everything in its power to keep

and maintain a minimum number of dissatisfied customers.

15 %

50 %

30 %

5 %

Satisfaction level

Excellent

Good

Fair

Dissatisfied

36

(chart 7)

Table 7 Categorized ratings

In the given general categories, pricing had the least unsatisfactory response

meaning that generally the customers were happy with pricing. Quality and pro-

fessionalism analysis also showed a general sense of satisfaction for the custom-

ers indicated by very low levels of dissatisfaction.

Delivery of Safaricom‟s products and services is not in sync with the other three

categories. This analysis indicates a sense dissatisfaction, which could better ex-

plain the 5% level of customer dissatisfaction level noted in chart 6.

0

10

20

30

40

50

60

70

80

Quality Delivery Professionalism Pricing

How would you rate safaricom's products & services

Excellent

Good

Fair

Unsatisfactory

37

(Chart 8)

Table 8 Likelihood of recommendations to others

With 71% of the customers likely to recommend Safaricom to other people then

it is worth investing in customer satisfaction because they will spread a positive

word of mouth, which is a very effective tool in marketing especially when tar-

geting new customers.

Those that are not likely to recommend Safaricom to others may have consisted

of the dissatisfied customers.

71 %

23 %

6 %

Recommendation of safaricom to others

Likely

Less-likely

Unresponsive

38

(Chart 9)

Table 9 Customer service response

Generally customer service response and courtesy seems to be fair. Customers

who received excellent and prompt response are only 5% and 9% for those who

received highly courteous customer service.

Most of the people received fairly good customer service response and courtesy

but that does not deter the author from pointing out the high levels of dissatisfied

customers. According to this research, 14% of the respondents were unsatisfied

with the promptness in customer service response and a whooping 22% were not

happy with the courtesy levels in customer satisfaction.

According to this survey, efficient customer service is lacking and may be one of

the reasons for the high levels of dissatisfaction of delivery of services as de-

picted on chart 7.

5

26

55

14

9

23

46

22

0 10 20 30 40 50 60

Excellent

Good

Fair

Unsatisfactory

Customer service response and courtesy

courtesy

Response

39

(Chart 10)

Table 10 likelihood of continuing with Safaricom.

This survey may have delightful news for Safaricom if this numbers are any-

thing to go by. If the customers remain true to their word then at-least 80% of

the 84 respondents are likely to remain with Safaricom as their service providers

while 12% are likely to make a switch. At least 8% are not sure of the moves

they will make.

6.1 Open-ended comments.

The questionnaire used for this survey had a section of open-ended questions,

which gave the respondents a chance to air their comments. This section is di-

vided into three topics namely: The things they liked about Safaricom, The

things they did not like about Safaricom and lastly Suggestions for improve-

ment. The most common views are as listed below.

6.1.1 Things they liked about Safaricom.

Most of the respondents were pleased with the m-pesa services that made bank-

ing easier for so many people who would otherwise not have gotten the chance

80

8 120

10

20

30

40

50

60

70

80

90

Yes May be No

Is the respondent likely to continue using Safaricom's services

Likeliness to continue with Safaricom

40

because of the relatively high banking charges. Respondents were also quick to

add that Safaricom is highly involved in community services that have enhanced

its image. They were grateful to Safaricom for that.

6.1.2 Things they disliked most about Safaricom

According to the findings from this survey, customer service is lacking and

needs to be dealt with. Quite a number of respondents pointed out that there is

some sort of network congestion especially on Friday evenings. Calls and text

messages hardly go through.

6.1.3 Suggestions

Most of the respondents left out this bit but the few who managed to air their

views suggested that customer service should be checked as well as reduce pric-

es for broadband connection. Additionally, some hoped to see an end to the net-

work jams in the near future.

6.2 CONCLUSION

It is very vital for any institution to assess and know the level of customer satis-

faction they are presently at. High customer satisfaction levels could translate in-

to profits for a firm such as Safaricom whereas dissatisfied customers are more

likely to shift in favor of competitors.

The main objective of this study was to find out the level of customer satisfac-

tion and as per the findings of this survey, Safaricom customers are quite satis-

fied with the products and services offered to them. It is of utmost importance

for a company to keep and maintain their customers by meeting and exceeding

their expectations hence satisfaction.

Although there are a small percentage of dissatisfied customers, Safaricom can-

not be able to please everyone but the company is trying to ensure that there is

minimal dissatisfaction amongst its customers.

41

The most significant issue that would require instantaneous response would be

the issue of customer service delivery. It is notably lagging the company. Ac-

cording to the numerous surveys in the recent past about Safaricom, the compa-

ny has got wind of this issue and has been working on it by introducing a service

whereby one can send a text message giving feedback on how they were served

while seeking customer service.

The second objective was to find out the main problems that customers come

across and since it has been noted that satisfactory customer service delivery is

lacking even after implementation of better ways of controlling it perhaps, it will

take a while before it is fully in place.

Public awareness of the improved ways of checking customer service delivery is

vital. This way, customers will be able to report complaint they may be having.

(http://www.safaricom.com/adminlive/FileUploads/Safcom2010Results/PDF%2

0version/pdf/custmark.pdf 27/09/2010)

Last but not least, the third objective was to seek suggestions for improvement

of services for Safaricom. The findings of this report indicate that customers

would prefer lower broadband connections and less jamming of the network.

Although Safaricom is on top of its game with continued success stories over the

years, there is always room for improvement. The research reveals that in gener-

al the customer satisfaction level is good there are major no alterations needed to

be made.

42

LIST OF FIGURES

Figure 1 The Kano model of customer satisfaction ...................................................... 12

Figure 2 The Gap model of service quality .................................................................... 15

Figure 3 The ladder of customer loyalty in relationship marketing ............................... 19

Figure 4 Factors influencing customer satisfaction ........................................................ 22

Figure 5 A step-by-step guide to measuring customer satisfaction ................................ 29

LIST OF TABLES/CHARTS

Table 1 Gender ............................................................................................................... 30

Table 2 Age Distribution ................................................................................................ 31

Table 3 Area of residence ............................................................................................... 32

Table 4 Profession .......................................................................................................... 33

Table 5 Various Safaricom's products ............................................................................ 34

Table 6 Satisfaction levels .............................................................................................. 35

Table 7 Categorised ratings ............................................................................................ 36

Table 8 Likelihood of recommendations to others ......................................................... 37

Table 9 Customer service response ................................................................................ 38

Table 10 likelihood of continuing with Safaricom. ........................................................ 39

43

REFERENCES

List of References

Philip Kotler et.al. (2008) Principles of Marketing. Fifth European Edition. England.

Prentice Hall.

Kotler, P. & Armstrong, G. & Saunders, J. & Wong, V. 2002. Principles of Marketing.

Third European Edition. Harlow: Pearson Education Limited.

Harris, K. Elaine. 2006. Customer service- a practical approach. Fourth edition. New

Jersey: prentice Hall.

Zeithaml V. & Bitner M. 1996. Services Marketing. First edition. Singapore. McGraw-

Hill Book Co.

Chakrapani Chuck 1998. How to measure service quality & customer satisfaction. Chi-

cago. American Marketing Association.

Crowther D. & Lancaster G. 2005. Research Methods. First edition. Oxford. Elsevier

Butterworth-Heinemann.

Maholtra Naresh 2005. Review of marketing research. New York. M.E. Sharpe Inc

Sarah Cook 2008. Customer Care Excellence. Fifth edition. London & Philadelphia.

Kogan Page.

Bo Bergman & Bengt Klefsjö 1994.Quality: from customer needs to customer satisfac-

tion. New York. McGraw-Hill Book co.

Richard .F. Gerson 1993. Measuring customer satisfaction. Pennsylvania. Crisp publi-

cations.

Michael.E.Porter 1998. Competitive advantage: creating and sustaining superior per-

formance. New York. The Free press.

Michael Solomon et al 2006. Consumer Behavior- A European perspective. England.

Pearson Education Limited.

Nigel Hill & Jim Alexander 2006. Handbook of customer satisfaction and loyalty mea-

surement. England. Gower Publishing Limited.

44

Internet sources.

www.safaricom.co.ke

www.theeastafrican.co.ke

http://news.xinhuanet.com/english/2008-05/31/content_8290022.htm

www.dailynation.co.ke

www.standardmedia.co.ke

www.businessdailyafrica.com

http://www.emeraldinsight.com/journals.htm?articleid=842399&show=html

How to Handle Customer Complaints | eHow.com

http://www.cellular-news.com/story/29920.php

www.facebook.com

www.yahoo.com

APPENDICES

CUSTOMER SATISFACTION SURVEY FOR SAFARICOM LIMITED COMPANY What is your gender?

□ Male

□ Female

Where do you reside?

□ Urban areas

□ Rural areas

What is your age-group?

□ 15-19 years

□ 20-35 years

□ 35-45 years

□ 45-60 years

□ Above 60 years

What is your professional status?

□ Student

□ Employed

□ Unemployed

□ Retired

Which Safaricom products do you normally use?

□ M-Pesa

□ Internet

□ Voice (making calls)

□ VAS (Messaging and music)

How would you rate the services that you normally use?

□ Excellent

□ Good

□ Fair

□ Dissatisfactory

How would you rate Safaricom in the following catego-ries; quality

□ Excellent

□ Good

□ Fair

□ Dissatisfactory

How would you rate Safaricom in the following catego-ries; Service delivery

□ Excellent

□ Good

□ Fair

□ Dissatisfactory How would you rate Safaricom in the following catego-ries; Professionalism

□ Excellent

□ Good

□ Fair

□ Dissatisfactory

How would you rate Safaricom in the following catego-ries; pricing

□ Excellent

□ Good

□ Fair

□ Dissatisfactory

How would you rate Safaricom’s customer service responsiveness?

□ Excellent

□ Good

□ Fair

□ Unsatisfactory

How would you rate Safaricom’s customer service cour-tesy?

□ Excellent

□ Good

□ Fair

□ Unsatisfactory Would you recommend Safaricom to others?

□ Likely

□ Less-likely

Are you likely to continue using Safaricom’s products and services?

□ Yes

□ No

□ Maybe

Additional Comments and suggestions.

Thank you for your participation!